TSEM5620 - Trusts for particular purposes: compensation under ESC A68 -example using dividend income - years to 2009-2010

The trustees must meet the conditions of the concession (TSEM5610).

This is how to calculate relief on dividend income.


 

 

Tax Pool

Tax pool brought forward

 

Nil

Dividend received

£90,000

 

Tax credit

£10,000

 

Gross income

£100,000

 

Tax due (dividend trust rate) @ 32.5%

£32,500

£32,500

Less non payable tax credit

 

£10,000

Income available for distribution

£67,500

 

Total Tax pool

 

£22,500

Amount distributed subject to PAYE

£67,500

 

The compensation payable to trustees is the lesser of


  • tax at trust, on the total payments which are treated as employment income

£67,500 @ 40 % =

£27,000
  • tax which the trustees have available in the ‘tax pool’ above

 

£22,500

The compensation payable is therefore

 

£22,500.

Home | Main Contents | Manual Contents
Previous Page | Next Page | Top | Menu